Dow tumbles as bad news rocks Wall Street

NEW YORK -- U.S. stocks plunged on Friday after massive losses by American International Group Inc. shook Wall Street and poor results from Dell Inc. rocked the tech sector.

"We had a trainload of bad news; they couldn't keep the bad news coming fast enough, yet we're going to end the week pretty much where we started," said Art Hogan, chief market strategist at Jefferies & Co.

The Dow Jones industrial average fell 315.79 to close at 12,266.39.

"It will be interesting to see what happens next week, since we're in for the same combination of bad economic data and bad corporate news -- that's what happens when you have an economic slowdown."

The stock indexes steepened their losses on a decline in consumer sentiment in February, with more households reporting financial distress than any time since the worst of the 1991 recession.

The sentiment data coincided with a survey of manufacturing and sector activity in the Chicago area, which fell to 44.5 in February, "indicating a contraction in the economy in the region," according to Lehman Brothers economist Drew Matus.

Earlier data had the Commerce Department reporting consumer spending climbing more than predicted in January, with the 0.4 percent hike in buying illustrating an increase in costs that is denting Americans' purchasing power.